UK-based retailer Next has reported that its full-price sales increased by 18.6% for the 11 weeks to 17 July compared to the same period two years earlier.
The growth in sales was attributed to a combination of “pent-up demand” for clothing with retailers reopening after Covid-19 related restrictions, the arrival of warmer weather from May and increased domestic spending due to fewer people going on holiday overseas, as well as more consumer savings being made during the pandemic.
Next said that sales across all its divisions improved during the 11 weeks.
The company’s total online sales grew by 44% during this period against the same period two years earlier.
In response to the increase in sales, Next has increased its full-price sales guidance for the rest of the year to 6%.
In a statement, the company said: “We do not expect sales to continue at these exceptionally strong levels, but we are more optimistic about the outlook than we were three months ago and have raised our sales guidance for the second half from +3% to +6%.”
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“We are increasing our central guidance for full year profit before tax by +£30m to £750m pre-International Financial Reporting Standard (IFRS) 16.”
Next has forecasted its surplus cash for the year at £240m ($330m).
This is the third time this year the retailer, which operates a 500-store network in Britain and Ireland in addition to its online business, has raised its profit forecast.
In May, Next raised its profit forecast for the year from £700m ($963m) to £720m ($990m) following its most recent sales forecast, which the company said had “smashed expectations”.
Next has also decided to pay £29m ($40m) of business rates relief to the UK Government, accounting for periods of this year when its stores were open without being charged.
The company said: “This decision was taken after consulting major shareholders who, between them, account for around 30% of our shares in issue.”